Shrugging off its traditional reliance for foreign-exchange earnings on jute goods and tea, Bangladesh has economically made giant strides, with home remittances and garment manufacturing giving momentum to a whole basket of non-traditional exports. But a cursory visit there is enough to dispel the general perception in Pakistan that Bangladesh is doing economically far better than Pakistan.

Despite multiple crises compounded by rampant corruption and a terror-driven law-and-order situation, Pakistan’s economy is far more resilient and multifaceted, notwithstanding the fact that the Bangladeshi taka is performing better than the Pakistani rupee. The pervasive mass poverty in Bangladesh far outstrips the comparable percentage of poverty in Pakistan. The focus of Bangladesh’s economy seems to be the city of Dhaka, with high-rise buildings mushrooming on scarce land with greater value than almost any other capital city in the world. Traffic jams are endemic. There is one thing in common to the two democracies – rampant nepotism and corruption – and these put them increasingly under threat, which is force-multiplied by the widening rich-poor gap and inflation triggering a mass upsurge.

To quote Khadimal Hasan in New Age: “Promises made by the Awami League during the 2008 general elections remain unfulfilled, good governance has remained elusive, the rule of law is yet to be established and human rights violation continues to be rampant.” Despite the Awami League government’s many failings, the main opposition Bangladesh Nationalist Party (BNP) could not play any significant role inside and outside parliament in projecting people’s concerns. The BNP has concentrated its anger on partisan issues, such as the “eviction of party chairperson Khaleda Zia from her Dhaka Cantonment House and the cases filed against her and her two sons for corruption taking precedence over pressing public concerns.”

Like in Pakistan, without political consensus about elections under a genuinely neutral caretaker government, the atmosphere in Bangladesh is charged with politics of confrontation. Fearing overturn of their present overwhelming mandate, the Awami League government forced an amendment through parliament abolishing the concept of caretaker governments. This could lead to a rerun of 2005 when the BNP, as the ruling party then, tried to engineer the vote. Street agitation for installation of a non-partisan government to conduct polls created a situation for an army-dictated superior judiciary-supported caretaker administration of technocrats taking power. Free and fair elections were ultimately held in 2008.

The ‘Bangladeshi Model’ failed when, within one year, the army forgot its resolve to stay away from politics. Armies can intervene for course corrections but are not equipped to run governments. At most they can run people who run governments, and that too for a short time.

Dr Debapriya Bhattacharya of the Centre for Policy Dialogue (CPD) observed that the country’s economy was approaching lower-level equilibrium in 2013, short of the GDP growth target of 7.2 percent, failing to reach even six percent, compared to the record 6.32 percent of the 2011-2012 financial year. With the CPD projecting that revenues collection will fall short of target, an additional TK100 billion will be needed to meet budgetary allocations. Remittance inflows of over $12 billion were a bright spot, with the budget deficit and balance of payments remaining in the safe zone.

Political uncertainty could destabilise Bangladesh’s macroeconomic stability, having a serious impact on the economy. To quote Abul Kalam Azad and Sharier Khan in The Daily Star: “A series of mega projects aimed at revolutionising communications, ports and energy sectors were rolled out, but due to weak governance, indecision, an inability to execute plans, corruption, fund shortages and donors’ conditions affected the progress of most of them.”

Nevertheless, given the prevailing recession in the developed world, it is not a bad performance. With some headway in projects in the power sector, one must commend the tremendous initiative of the present government for a ‘digital’ nation by 2020, the progress matching India in quality, if not in quantum. An 18 percent interest on loans to the manufacturing sector, rising to more than 20 percent for small businesses, almost double that in India, is pushing up production costs and adversely affecting people’s purchasing power. To its credit, the Bangladesh Bank kept a cap of seven percent for export financing and 13 percent for farm loans when withdrawing the cap on rates imposed in 2008 to help businesses cope with world recession.

The campaign in Assam against Bangladeshi settlers and the water issue will adversely impact India-Bangladesh relations. Expert Mohammad Khaliquzaman said that the entire northern area was turning into a desert due to lack of water, with India releasing 20 percent less water in the past five years than that stipulated for Farakka Barrage in the Farakka Water Treaty. The Indian intention to unilaterally build other dams upstream, including one at Tipaimukh, is alarming. Construction of dams is not needed for saving rivers but to save the lives of people. 

The ugly controversy over how many people died during the 1971 civil war is politically motivated to vitiate the congenial atmosphere developing between peoples of Pakistan and Bangladesh. The truth is not something to be proud of. While nowhere near the quantum being propagated, the three-million figure is ingrained in the Bangladeshi national psyche. The local population did suffer mass atrocities at the hands of elements of the Pakistani army. However, in many isolated places non-Bengalis were massacred by mob action. There were targeted killings and rapes. In her book Dead Reckoning, Sarmila Bose, granddaughter of Indian revolutionary Subhas Chandra Bose, dismissed the allegations of ethnic-cleansing, rape and killings against the Pakistani army as highly exaggerated. Commensurate atrocities carried out against the non-Bengali population, especially the Biharis, were never documented.

The driving force in the arguments, in her words, is “bitter emotional partisanship.” With both sides remaining in absolute denial of truth, instead of reconciling fact with fiction, there is no closure in sight. Pakistan should request the UN to commission professional verification of the claims of Bengalis and non-Bengalis perishing in this horrific civil war, offering to pay for the services of internationally renowned independent auditors. It will be money well spent.

Another thing common in Pakistan and Bangladesh is widespread resentment against what is perceived as Indian arrogance by the intelligentsia and the masses. This is much less so in Pakistan then in Bangladesh, where the generally held belief is that the Indian government dictates everything to the Bangladeshi government. PCB chairman Zaka Ashraf was either dangerously naive or plain ignorant in fantasising that India would ever allow the Bangladeshi cricket team to tour Pakistan. Neither Pakistanis nor Bangladeshis (as opposed to their present government) like a master-slave relationship. India’s image of a bully is not conducive to a future common market in South Asia.

The inland transit facilities demanded by India highlight an important geopolitical home truth. Bangladesh’s pivotal economic location is extraordinary. Surrounded by West Bengal and the impoverished ‘Seven Sisters’ states of northeast India, Bangladesh’s two bustling ports make for an economic centre of a possible Association of Eastern States of South Asia. The AESSA concept means an economic (if not political) confederation of almost 400 million people. Standing on a failsafe line of destiny with corrupt governance alternating between the two badly polarised ladies, Bangladesh desperately needs an honest, competent government truly dedicated to the people.

Click here to read this column at The News International.